What is Real Time Bidding or RTB?

posted by Chris Valentine

Life is never the same as it used to be even two decades ago. Technical progress has changed our lifestyle, manners and habits.

If we talk about media, there are also a lot of changes as well. Main sources of information were TV, radio, newspapers and magazines. With Internet invention we still take into account initial medias, but main focus now is in online ecosystem. But evaluation has changed it a lot, too.

Online advertising has started with well-known and still working ad networks where Advertisers used to buy bulk of impressions to catch their potential audience. One of new trends is RTB advertising. Marketers are still suspicious about it, but is the picture really so terrible as it is described?

What is Real Time Bidding?

RTB technology implies buy-sell process of online advertising on auction principle. The whole magic happens exactly at the moment when the page is loaded. These systems generally do their job in accompaniment with DSP (Demand Side Platforms) and ad exchanges.

One example to see how it works.

A visitor drops into the website where mobile telephones are sold. With the help of cookie files, it becomes known that current impression belongs to a man nearly 30 years old, who is likely to be married and has one child, to reach the website he uses a desktop and was looking at other websites with mobile gadgets, kid stuff and cars.

According to this information, we have 3 Advertisers who want to show him their ads: car child seat manufacturer, owner of a shop with mobile gadgets and a car rent shop. The start bidding and the owner of the highest price will show the ad. The process takes less time than winking and is finished as soon as the page is loaded. The procedure will be repeated with each new visitor.

Can we equate RTB with programmatic?

Well, partially yes. But, there is a detail one should clearly understand.

RTB is a part of programmatic, but not all programmatic implements RTB. What does it mean? Some ad platforms use so called direct programmatic. It means that Publishers don’t use real-time bidding platforms, but sell their impressions at stable fix prices in advance.

How Advertisers will win from RTB

There are two main factors should be mentioned.

Efficiency. Now advertisers have their campaigns more client-oriented. Consideration of each particular impression helps to understand the outcome of it.

As a result, we can talk about wiser money spending. Everyone now can track how each cent was spent and for which visitor.

It also becomes good for users themselves as the ads become more personalized and, lucky we are, the day when ad content can be counted as useful, has come. People are less negative about advertising in this case and CTR after new technology implementation is also significantly higher.

Should Publishers be worried about RTB?

The greatest fear was that bidding platform will bring down the cost of their inventory. But, at the same time they have a free hand to state a minimal price they are ready to continue business.

Besides, websites with small traffic can now also participate as focus is given to the impressions they deliver.

While key players are trying to understand the entity in front of them, others are slowly implementing the technology. There is also an opinion that new trend will outlive its ancestor. We can’t totally agree here. Nowadays we can see co-existence of an old and technological solutions on the market. To tell the truth, they acquire some traits and business manners from each other, but while the fusion hasn’t happened yet – it would be a good idea to take benefits implementing them both.

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